Modi pins hopes on new BRICS bank

NEW DELHI -- Indian Prime Minister Narendra Modi headed to Brazil Sunday for a meeting of the BRICS group of emerging powers, hoping to seal the long-discussed deal to open a new development bank.

Modi will be the guest of Brazilian President Dilma Rousseff who also hosts the leaders of Russia, China and South Africa on Tuesday before a meeting with South American leaders the next day in Brasilia.

The countries are looking to set up a development bank to finance infrastructure projects as well as a reserve fund to fend off currency and balance of payments crises.

The bank and the reserve are being seen as a counterweight to Western-dominated financial organizations like the Washington-based World Bank and International Monetary Fund.

Modi, who was elected with a massive mandate in May, was upbeat about the two economic initiatives finally taking shape.

“I look forward to the successful conclusion of major BRICS initiatives, like the New Development Bank and the Contingent Reserve Arrangement, which have seen significant progress since their launch in New Delhi in 2012,” he said in a statement.

“These initiatives will support growth and stability in BRICS and also benefit other developing countries,” the Hindu nationalist leader added.

The BRIC acronym, to which South Africa was later added, was created by economist Jim O'Neill, who used the term in 2001 to describe the growing clout of the economic grouping.

The summits come as BRICS countries, whose economies together represent 18 percent of the world total, see slowdowns in their once frenetic rates of growth.

Russia and Brazil are expected to see growth of just one percent this year while India is mired in its deepest slowdown in a quarter-century.